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Jon Moulton walks out on Alchemy and COA

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7th Sep 2009
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The high-profile departure of Alchemy Partners chief Jon Moulton this weekend reverberated through to business software house COA Solutions, where he was a non-executive director. John Stokdyk reports.

Moulton, a former insolvency practitioner, founded Alchemy Partners in 1997 and masterminded its push to create a consolidated software group. Beginning with the acquisition of Cedar Group in 2002, Alchemy supported a series of nine acquisitions (including OpenAccounts, Grampian Software and Version One) to create what is now claimed to be the UK’s third biggest applications company.

To kick off Alchemy’s business software adventure, Moulton took the reins for the the first few months to bed down a back-to-basics strategy. “Like many of our acquisitions, Cedar was poorly managed. It had unhappy customers, no support, and no clear product roadmaps. The only thing they could do was pour booze down their clients’ necks, which was not a sustainable strategy,” he told AccountingWEB in 2005.

COA Solutions was just one of Alchemy’s many investments, but as deals dried up in the recent downturn, Moulton lost faith in the colleagues around him, particularly his heir apparent, Dominic Slade.

In a letter to the Financial Times announcing his retirement Moulton claimed “Alchemy is not what it was” and took issue with Slade's plan to turn the firm into a financial services specialist.

"I do not support this strategy,” Moulton announced. The firm was in such a state that he advised an orderly termination of its overall investment plan.

COA gained invaluable publicity from Moulton’s involvement, for example in a series of “How to survive the recession” seminars he hosted during the past 18 months. But he also provided a very well informed guiding hand behind the scenes, according to COA Solutions director of product strategy Mark Lane.

“When Alchemy got involved with us in the first instance, Jon was directly involved in the major reorganisation that took place. Once we got that out of the way, the relationship has matured. We’ve increased our revenue five times and are now turning over £60m,” Lane said

“We knew that he intended to retire, but were surprised it was brought forward.”

As a board member, Moulton attended twice quarterly meetings, which he enlivened with sharp questions not just about finance, but also about product strategy.

 “He brought more than you would normally expect from a non-executive director,” Lane said. “He brought a certain amount of perspective, not just as a pair of finance ears. He understood how software is used and what it could do for business.

“It benefited us that Jon is a pretty technically savvy guy, who worked previously in software development. He really did understand the issues of the software industry, in the same way he understood other sectors he got involved with.”

Lane added that Moulton “would be the last person to dwell on sentimentality”. COA’s managers had good working relationships with other people at Alchemy. While Alchemy has not yet communicated who will take Moulton’s place on the COA Solutions board, nor indicated any changes of strategy, Lane said the company’s managers would remain focused on running the company on a day-to-day basis.

Jon Moulton on AccountingWEB.co.uk

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By User deleted
08th Sep 2009 13:34

COA Solutions' management will provide the continuity customers

John - It is true that COA Solutions welcomed Jon Moulton’s valuable contributions during board discussions. However, please bear in mind that the transformation of the COA Solutions business from a niche player (7 years ago) with 200 customers and £12m revenues to a profitable UK leader with 4,000 accounts and £60m of revenues was achieved through the skilled execution of the day-to-day management team. This management team has been working closely together for 7 years and will provide the continuity our customers expect whilst Alchemy manages its own succession process.

Mark Thompson, Managing Director, COA Solutions

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